Housing Data and Mixed PMI Triggers EUR/USD Stumble

By Lex Yaranu | Sunday, July 26th, 2015

housing data eurusdThe EUR/USD took a slight stumble on Friday. This fall reverses some of last session’s gains. The data is mixed on both continents, but housing and the mixed data are blamed.

Consumer confidence might be the blame for issues in Europe where the Markit flash euro zone PMI fell to 53.7 in July. This is down from a four-year high of 54.2 a month earlier. Confidence might have dimmed after a recent slowdown in manufacturing and service sectors throughout the zone.

USD/CAD had a better Friday after reaching a 12-year high at 1.302 before a small fall back at 1.3047.

The news was the opposite for the other side of the pond as the dollar surged on Friday morning. Manufacturing data was positive, but after negative news of disappointing housing figures the gains dipped. The Markit July PMI index for the US. In the morning moved up to 53.8 above June’s reading of 53.4. When the news of the U.S. Commerce Department said new home sales had taken a 6.8% dive last month to 482,000 while Median home prices still unperformed at $281,000 the dollar shifted downward.

Those hopeful of good news among currency traders await the Federal Open Market Committee meeting next week. Traders might be found with an ear to door hoping for hints about a longed for interest rate hike for the Federal Reserve. There is a 50% chance of a hike according to Federal St. Louis president James Bullard who earlier this week stated he believes the FOMC meeting in September will see such a raise. Janet Yellen the Fed chair, also justified a hike agreeing that the conditions in the economy justify a hike at some point in the next year. It’s been a decade since U.S. central bank lifted its Federal Funds Rate, and short-term interest rates have stayed between zero and 0.25% since that time.

Friday also saw the unusual event of the Fed announcing it “inadvertently” published a staff forecast on its website that stated staff economists were anticipating a quarter-point rate hike sometime this year.

Moreover, Democratic Party frontrunner and presidential candidate Hilary Clinton announced to make reforms on corporate taxes on Friday as well as increase transparency in stock buybacks and executive compensation changes.

Published in News & Analysis

One Comment

  1. Good analysis. Thanks

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